Simple sequence repeat (SSR)-based genetic markers are being actively developed for the majority of crop plant species. In barley, characterization of 290 dinucleotide repeat-containing clones from SSR-enriched libraries has revealed that a high percentage are associated with cereal retrotransposon-like and other dispersed repetitive elements. Associations found were with BARE-1, WIS2-1A, PREM1 and the dispersed repetitive element R173. Additional similarities between different SSR clones, which have no matches in DNA sequence databases, indicate that this phenomenon is probably widespread in the barley genome. Sequence homologies to the non-coding regions of several cereal genes were also explained by homology to mobile genetic elements. The SSRs found can therefore be classified into two types: (1) those with unique sequences on either flank, and (2) those which are intimately associated with retro-transposons and other dispersed repetitive elements. As the cereal genome is thought to consist largely of this type of DNA, some random association would be expected. However, the conserved positions of the SSRs, relative to repetitive elements, indicate that they have arisen non-randomly. Furthermore, this class of SSRs can be classified into three subtypes: (1) those which are positioned 3' of a transposable element with unique sequence on the other flank, (2) those positioned 5' of a transposable element, and (3) those which have arisen from an internal sequence and so have transposable element sequence on both flanks. The first appear to be analogous to the class of SSRs in mammalian systems which are associated with Alu elements and SINEs (short interspersed elements) and which have been postulated to arise following integration of an extended and polyadenylated retro-transcript into the host genome, followed by mutation of the poly(A) tract and expansion into an SSR. For the second, we postulate that a proto-SSR (A-rich sequence) has acted as a 'landing pad' for transposable element insertion (rather than being the result of insertion), while the third includes those which have evolved as a component of an active transposable element which has spread throughout the genome during bursts of transposition activity. The implications of these associations for genome and SSR evolution in barley are discussed.